Innovassynth Investments Ltd Management Discussions

1. Macro-Economic Environment:

As the global economy maintained its war against inflation, the US Federal Reserve turned bullish right before the start of FY23, raising rates by 8 times, or 450 basis points, to combat inflation. High inflation was a global phenomenon, and central bankers around the world remained hawkish, with Indias Reserve Bank of India (RBI) raising interest rates by 250 basis points (bps) last year. The interest rate hike has helped CPI inflation to fall (US and India inflation down 400bps and 200bps, respectively) from its peak in FY23. In addition, from that, global tensions held the supply side in check, and the appearance of a new banking crisis in the fourth quarter added to the uncertainty. In FY23, the Indian economy demonstrated strong resilience. According to the RBIs Monetary Policy Report for April 23, Indias real GDP is expected to rise by 7% in FY23. Furthermore, the majority of the high frequency indicators exceeded pre-pandemic levels and had robust momentum. For FY23, gross GST collection increased by 22% year on year, PV sales increased by 27% year on year, electricity consumption increased by 10% year on year, rail freight volume increased by 6.6% year on year, crude steel production increased by 5% year on year, bank credit increased by 15% year on year, IIP increased by 5% year on year, and others. Consumer confidence in rural India has also remained good, owing to the fourth straight year of normal monsoon, record foodgrain output in FY23, and government support through higher MSP, wage increases under MNREGA, and other measures. The banking and non-banking financial company (NBFC) sector in India has witnessed significant market driven and regulatory events in the last decade. Cumulatively, these have had a profound impact on the industry. Some of the noteworthy developments include the issuance of new bank licences for universal banks, introduction of a new category of banks (small finance banks and payments banks); insolvency processes and the resolution of a few large non-performing assets (NPA) situations; and consolidation of public sector banks (PSBs), etc.

The banking and NBFC sector are once again at an inflexion point, given the potential transformational, operational and stakeholder changes influenced by the above-mentioned drivers. Theres a need for financial institutions to assess and evaluate their current business model and take a strategic call on their commercial and operational framework in anticipation of newer ways of doing business coupled with changes in market and competition landscape.

The major indices ended FY23 nearly flat, with the Nifty 50 falling 0.6% to 17,359 and the BSE Sensex rising only 0.72% to 58,991. A relatively poor outcome after the Nifty and Sensex gained over 19% and 17%, respectively, the previous fiscal year. However, the domestic market outperforms numerous other international markets, including the Dow Jones (-4.05%), FTSE 100 (+1.34%), Hang Seng (-7.26%), Kospi Composite (-10.18%), Shanghai Composite (+0.43%), and Bovespa (-15.10%). Throughout the year, the posture of all Central Banks was fiscal tightening in order to contain the rise in inflation.

2. Industry Structure and Developments:

The Company is in the investment business and your company holds 31.79% in Innovassynth Technologies (India) Limited.

3. Opportunities and Threats:

Your Company has invested in Innovassynth Technologies (India) Limited-(ITIL) which is one of the internationally recognized manufacturers and develops nucleosides and amides. Even in this pandemic situation, Innovassynth Technologies (India) Ltd has done exceptionally well. Your Company has not diversified its investment in other entities except ITIL hence the companys fortune tide with the performance of Innovassynth Technologies (India) Limited. The global Contract Development and Manufacturing Organization (CDMO) market reached a valuation of $224.6 billion in 2023 and is projected to grow at a rate of 6-7% annually over the next five to six years. In contrast, the Indian CDMO market is forecasted to expand at a significantly higher CAGR of 14.67%, increasing from $22.51 billion in 2024 to $44.63 billion by 2029. Indian companies are actively engaging in acquisitions, partnerships, and investment activities, particularly within the biotech sector, to enhance their capabilities and increase their market share.

4. Outlook:

Performance of the Innovassynth Technologies (India) Limited is the key factor for the sustainability of the company, your company has an optimistic approach towards the performance of ITIL.

5. Risk & Concerns:

Non-Diversification of the investments other than ITIL is one of the concerns for the Company.

6. Internal Control Systems and Their Adequacy:

Internal control of the Company is monitored vide circulation monthly compliance sheets, the same is discussed, studied, forecasted and proper plan of action is drawn accordingly.

7. Developments in Human Resources:

During the year, the Company welcomed Mr. Dilip Oswal as a Non-Executive Independent Director. Mr. Dilip Oswal brings a wealth of experience to the Finance and taxation sector, enhancing the boards expertise and diversifying its perspectives.

8. Significant Changes in Key Financial Ratio:

During the period, Only Current Ratio has changed due to increase in borrowings as the compared to previous Financial Year.

9. Return on Net Worth:

During the period, there has been no significant changes in Return on Net worth as compared to the immediately previous financial years.

For and on Behalf of the Board of Directors of
Innovassynth Investments Limited
Dr Hardik Joshipura	Sandesh Mhadalkar
Chairman & Managing	Director
Director
(DIN: 09392511)	(DIN: 08929791)
Khopoli, 29th May 2024